The Highball, off South Lamar Boulevard in Austin, Texas, is a diner and bowling alley with bar and cinema attached, to which your cocktail and burger can accompany you to a movie. If that wasn't amusement enough, head upstairs and you'll find a den of karaoke rooms, each with a different theme: this one disco, this psychedelia, this metal. Ben Wheatley and Michael Smiley, director and star of Kill List, are sitting pretty in Rapper's Delight, the "Old School Hip Hop Room" ($35 ph, max 17 people).

They make a happy sight, slipping about on the shiny black banquette, beneath the day-glo graffiti of a subway train and moustachioed dudes and lemon dollar signs (no guns, though, nor weaponry of any sort).

No wonder. Two nights before was the first ever screening of Wheatley's followup to Down Terrace (the cult Brighton crime film), and it went down a treat. Or, rather, a prodigiously effective trick or treat. Kill List, in which Smiley plays one half of an ailing contract killing partnership struggling to survive in the face of the recession and a Satanic coven, is, simply, terrifying.

It's one of many battered veteran films which played at the festival, but its true subject matter is, in Wheatley's words, "the country being fucked". While Down Terrace also had themes of combat – its bent protagonists represented Blair, Wheatley explains, "and they waged war on all these other people cause they thought they were right", Kill List is largely about a small business failing. "What these people do is really morally reprehensible but they're still a family unit trying to support themselves." Claustrophobic visuals, plus a deep bass sound mix designed to feel as if it's passing through you, layer up the dread.

As the credits rolled at that first screening, the pair's nerves didn't dissipate immediately. "There was just a collective silence," says Smiley. "I was like: oh shit, they don't like it. And then you look back and just see everybody staring at the screen, slightly open-mouthed, trying to recalibrate their brain and force themselves back out of this horror into reality. That was quite heartening."

Smiley was always a lot less worried than his director: "I was like: I know it's brilliant; so fuck 'em if they don't enjoy it." For Wheatley, though, its good reception was simply a relief. "I've just been in a state of fear and dread right up until the film is showing, and then it's fear and dread to see how it's gone down."

Such apprehension is something of a shock: Wheatley is a returning hero in Austin. Down Terrace went from a surprise inclusion on the 2009 programme of the Fantastic Fest ("They told me this story about how they watched five minutes, then thought they'd give it another five, then when it was over though – oh, all right then") to surprise victor, scooping the Next Wave prize. It went on to pick up a slew of gongs – best British feature at Raindance; the Evening Standard's best newcomer award – and established Wheatley as a major new talent.

But premiering that film was a different kind of experience entirely. "Down Terrace was self-funded so we knew if it was shit we could just throw it away; no one would know. We came with no preconceptions. This time round it's quite a mind-blower. We're back but with a movie that's got a bit more heft behind it. They've been weaving their strategic magic of holding it back and creating buzz and all that. It feels much more like the sort of experience you've read about rather than that of last time. This was a bit more high stakes. It's been quite stressful."

Plus, the intensity of upset that Kill List can cause (talk of a "Kill List stare" emerged even after a few cast and crew screenings in London) had left Wheatley doubting whether he should release it at all. "You end up halfway through the film questioning why you're doing it. It leaves traces, memories of things and arguments and screaming and it does affect you. On top of that I was thinking: shit we're going to put this out into the world for people to see. Should I have even done that? You go into it innocently; it's easy to just knock it out. But then you see it and you go: this is my vision. Ooooh! Oh no no!" He laughs. "I think I will step more lightly into genre next time. I won't be going: I really want to make that war film."

Another aspect of the process Wheatley is more familiar with second time round is the rapidity of the process. "Back in 2009, we didn't even think about the fact people would blog and tweet straight away," he says. "But we got back to the hotel room and all the reviews had been written – bang! And it was like: oh fuck. I guess we were in an older world timeframe where it might take a couple of days at least to find out what people thought. The film was made that night and sold that night really."

There were preconceptions to shed, too; suspicions Americans might not get their style. "With Down Terrace they were howling laughing all the way through it, and we were like: fucking hell, we didn't even think anyone would understand the accents let alone enjoy it. But people here come for odd, good films. It's almost like the audiences in London can be a bit too cool for school."

Smiley agrees: "You've got a stereotype in your head of what an American is from what's been fed to you and then you come here and everyone gets everything. They know their onions."

That said, wandering round Austin ("a fucking funky wee town") the day before he was accosted by a punter who'd seen him in the film the day before. Rather than being cowed, or even timid, he praised the film, then proffered the opinion that its star looked "a lot bigger and fatter and older on screen". "He was saying what he was thinking," says Wheatley. "You could feel the words dropping out of his mouth. You wouldn't get that back home."

• Optimum Releasing today announced they'd secured UK distribution rights to Kill List. IFC Midnight will release the film in the US.